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Federal Deposit Insurance Corp. v. Thorton

United States District Court, M.D. Tennessee, Nashville Division

August 20, 2014

FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR TENNESSEE COMMERCE BANK, Plaintiff,
v.
ANTHONY W. THORTON, et al., Defendants.

ORDER

JOHN T. NIXON, Senior District Judge.

Pending before the Court is Plaintiff Federal Deposit Insurance Corporation, as Receiver for Tennessee Commerce Bank's Motion for Attorneys' Fees and Costs ("Motion"). (Doc. No. 108.) Defendants Anthony W. Thornton, Elizabeth Thornton, and Bowling Green Freight, Inc. ("Defendants") filed a Response in Opposition to Plaintiff's Motion. (Doc. No. 111.) For the reasons below, Plaintiff's Motion is GRANTED in part and DENIED in part.

I. BACKGROUND

A. Factual Background

The Court adopts the Findings of Fact section of its order granting judgment in favor of Plaintiff in this matter (Doc. No. 104 at 1-3), unless otherwise noted.

B. Procedural Background

On January 27, 2012, Plaintiff filed this action in the Davidson County Chancery Court, alleging breach of contract and breach of guaranty agreements based on several loan agreements entered into between Tennessee Commerce Bank and Bowling Green Freight, which were guaranteed by the Thorntons. (Doc. No. 1-1.) On February 27, 2012, Defendants removed the case to this Court pursuant to 28 U.S.C. § 1332. (Doc. No. 1.)

The Court held a bench trial on August 6, 2013. (Doc. No. 85.) On December 9, 2013, the Court entered judgment in favor of Plaintiff in the amount of $134, 722.50 and held that "[t]he prevailing party may move for attorney's fees and costs." (Doc. No. 104 at 11.) On December 23, 2013, Plaintiff filed its Motion, along with a Memorandum in Support and a Declaration of John M. Hull. (Doc. Nos. 108-110.) Defendants filed a Response in Opposition to Plaintiff's Motion on December 30, 2013. (Doc. No. 111.)

II. LEGAL STANDARD

Attorney's fees awarded by federal courts are generally the result of a party prevailing under federal fee-shifting statutes. See, e.g., 42 U.S.C. § 1988(b)(2012). In such cases, federal courts have developed federal common law for the determination of these statutory attorney's fees. See Ford v. Uniroyal Pension Plan, 154 F.3d 613, 620-21 (6th Cir.1998) (applying federal common law to determine attorney's fees under ERISA). However, where a district court sits in diversity jurisdiction, "attorneys' fees are governed by state law." Hometown Folks, LLC v. S & B Wilson, Inc., 643 F.3d 520, 533 (6th Cir.2011). Generally, these state-law governed attorney's fee awards are derived from contractual fee-shifting provisions, which are thereby governed by state contract law. See id.

The Sixth Circuit has explained, however, that "the reasonableness of an award of attorneys' fees can be analyzed under federal common law, " even where the attorney's fees are provided for by a contract governed by state law, "because attorney fee awards traditionally have not been under the exclusive domain of the states." Graceland Fruit, Inc. v. KIC Chems., Inc., 320 F.Appx. 323, 328 n.6 (6th Cir.2008) (quoting Ford, 154 F.3d at 620). The Sixth Circuit subsequently cautioned that the reasoning of Graceland is only applicable where "the attorney fee issue [is] ancillary to the main litigation." Alticor, Inc. Nat'l Union Fire Ins. Co. of Penn., 345 F.Appx. 995, 1000 (6th Cir.2009).

The Court finds the request for attorney's fees in this case to be ancillary to the main litigation, given that the main focus of this case was to determine whether Defendants were liable for breach of contract and breach of guaranty agreements, as evidenced by the Court's order entering judgment in favor of Plaintiff. ( See Doc. No. 104.) Moreover, the only contested issue in this case regarding attorney's fees is the calculation of the award. Thus, the Court applies the Sixth Circuit's standards for determining the appropriate attorney's fee award in this case. See Crestwood Farm Bloodstock, LLC v. Everest Stables, Inc., Nos. 5:09-cv-317-KKC, 5:10-cv-72-KKC, 2013 WL 1332499, at *1 (E.D. Ky. Mar. 29, 2013), aff'd, 751 F.3d 434 (6th Cir. 2014).

III. ANALYSIS

In this case, Plaintiff requests a fee award of $50, 208.78. (Doc. No. 108 at 2.) Specifically, Plaintiff requests attorney's fees in the amount of $44, 368.15, costs in the amount of $840.63, and "fees and expenses for Plaintiff's post-judgment collection efforts" in the amount of $5, 000.00. ( Id. at 2.) Plaintiff attached a detailed account of the time its attorneys spent on this case and associated costs to the Declaration of John M. Hull, which was filed with Plaintiff's Motion. (Doc. Nos. 110; 110-1.) Additionally, the Declaration states that "[b]ased upon Plaintiff's counsel [sic] experience with post-judgment collection activities, it appears that the amount of $5, 000.00 would be reasonable and necessary in order to pursue the collection of this matter." (Doc. No. 110-1 ¶ 3.) Plaintiff's counsel expects their "post-judgment collection activities" to include: (1) "domesticat[ing] this action in Kentucky where the principal office of Bowling Green Freight, Inc. ...


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